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Score penalty for utilization ratio

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Anonymous
Not applicable

Score penalty for utilization ratio

Hello,
If I had a balance of $260 on one credit card and paid the balance down and now have a balance of $20 left over will my credit score drop because it went for 4% to 0 now. Or does it only drop if it reports $0. I have 3 credit cards with a total limit of $5,550. And only one card has a $20 balance the other 2 are $0 balances.
6 REPLIES 6
Anonymous
Not applicable

Re: Score penalty for utilization ratio

Search for AZEO on the forum. Maybe that will help until one of the many experts on this forum chime in.

Message 2 of 7
Remedios
Credit Mentor

Re: Score penalty for utilization ratio


@Anonymous wrote:
Hello,
If I had a balance of $260 on one credit card and paid the balance down and now have a balance of $20 left over will my credit score drop because it went for 4% to 0 now. Or does it only drop if it reports $0. I have 3 credit cards with a total limit of $5,550. And only one card has a $20 balance the other 2 are $0 balances.

The score drops happens when all your cards report $0.00

If you have one card reporting a balance, you're fine. 

Message 3 of 7
Anonymous
Not applicable

Re: Score penalty for utilization ratio


@Anonymous wrote:
If I had a balance of $260 on one credit card and paid the balance down and now have a balance of $20 left over will my credit score drop because it went for 4% to 0 now.

You didn't drop from 4% to 0%; you dropped from 4% to 1%.  All decimals are rounded up to the nearest whole number when it comes to Fico scoring.  So, your $20 balance even if it was .003% (that's a $20 balance on a $6k limit) it's going to round up to the nearest whole number, so you're now at 1% reported utilization on that account. 

Message 4 of 7
Anonymous
Not applicable

Re: Score penalty for utilization ratio

@brutalbodyshots will my score drop from that?
Message 5 of 7
SouthJamaica
Mega Contributor

Re: Score penalty for utilization ratio


@Anonymous wrote:
Hello,
If I had a balance of $260 on one credit card and paid the balance down and now have a balance of $20 left over will my credit score drop because it went for 4% to 0 now. Or does it only drop if it reports $0. I have 3 credit cards with a total limit of $5,550. And only one card has a $20 balance the other 2 are $0 balances.

No, $20 is enough to count as a balance for scoring purposes. It will help, not hurt, your scores.


Total revolving limits 657200 (536700 reporting) FICO 8: EQ 712 TU 710 EX 708

Message 6 of 7
Anonymous
Not applicable

Re: Score penalty for utilization ratio


@Anonymous wrote:
@brutalbodyshots will my score drop from that?

Your Fico scores will never drop from a balance paydown with the lone exception being your only account with a reported [non-zero] balance reporting as $0.

Message 7 of 7
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